:: Overview ::

New Investment Policy introduces initiatives both at the national and sector-level

The development of the New Investment Policy is critical in ensuring Malaysia remains a competitive destination for high-value investments which can deliver sustainable and holistic economic growth. By anchoring on a clear set of national priorities such as the National Investment Aspirations, the New Investment Policy ensures key changes are implemented to strengthen Malaysia’s foundations to develop new and existing high-value growth ecosystems, whilst ensuring future policies and investments are targeted at delivering maximum mutual value to investors and the nation alike.

The approach laid out in this report is designed to address systemic challenges hindering investment growth at both national and sector levels. This ensures that Malaysia adopts a systematic approach to drive initiatives at a national scale to address systemic challenges across all sectors, backed by targeted actions within key sectors to unlock new investment opportunities and act as wider enablers of growth

National Level

Overarching national-level initiatives to address systemic challenges and deliver on the NIA

Sector Level

Sector - specific initiatives to unlock specific investment opportunities aligned to the NIA

The New Investment Policy is founded on
clear national targets

The New Investment Policy takes a comprehensive approach to catalyse high-quality investments to deliver forward-looking and equitable growth for the nation. It is founded on clear target outcomes, strategic planning, and initiatives at both national and sectoral levels

Top-line Targets

Sustained economic growth

4.5 - 5%

GDP growth per annum

(3.6% CAGR 2011 - 2019)

Sustained national wealth growth

5.5 - 6.5%

GNI per capita growth per annum

(3.8% CAGR 2011 - 2019)

Re-invigorating Investment ecosystem

4.0 - 5.0%

Private sector gross fixed
capital formation per annum

(3.8% CAGR 2015 - 2019)

National Investment Aspiration Targets

Increased economic complexity

Regional R & D and Innovation Hub

Top 25 on Global Innovation Index (33^rd in 2020)

Sophisticated exports with high economic value add

Top 20 on Economic Complexity Index (24^th in 2020)

Create high value job opportunities

Knowledge intensive and highly skilled jobs

35% knowledge-intensive employment (29% in 2020)

Extend domestic linkages

Enhanced Global Value Chains integration

~RM30Bn avg. annual DIA⁶ (23Bn for 2016-2020)

Deepened local supply chain integration

~60% domestic contribution to Mfg. Value-added (55% in 2015)

Intentionally competitive SMEs

~25% of total exports from SMEs(18% in ’19)

Develop new & existing economic clusters

Expanded existing Clusters

Growth of export value in top 10 groups (3 digit MSIC codes)⁵

Accelerated growth of new clusters

Average growth of export value in top 40 new product classes

Improve Inclusivity

Balanced economic development across states

>0.5 ratio of total investment (FDI & DDI) to %GDP contribution across all states¹

Enhance ESG
practices

De- risked economy against ESG factors

Top 40 on Sustainalytics ESG factors ranking² (46^th in 2021)

High compliance and quality ESG reporting

>95% PLC Avg. Compliance³ (93% in 2020)

>75% PLC Avg. Quality⁴ (63% in 2020)

Calculated as ratio of total investments in each state as a proportion to the state's GDP contribution.
Sustainalytics Country Risk Ratings Report ESG factors score covering Natural and produced capital, Human Capital and Institutional Capital
Average compliance by review of public -listed companies across sectors and market capitalisation
Average quality measured by review of 300 publicly listed companies across sectors and market capitalisation, with scoring 0-3 (0= general statements,1=qualitative assessment)
MSIC 2008 includes 238 groups
Refers to Domestic Investment Abroad

Six strategic thrusts to drive the National Investment Aspirations

Six strategic thrusts have been defined to achieve these target outcomes, and, by extension, NIA ambitions. The strategic thrusts aim to address a number of systemic challenges hindering investments, as identified through extensive consultation with stakeholders and detailed analysis of the challenges. The six strategic thrusts provide a foundation for the overarching strategy to strengthen Malaysia’s investment ecosystem

Unified Investment strategy to laser focused delivery on NIA and ESG

Agile and forward-looking incentive packages that meet needs of investors

IPA landscape with clear roles and responsibilities for A simplified investor journey

Accelerated innovation ecosystem to nurture high quality investments

Vibrant talent pool that meets needs of labour market

Streamlined business environment for improved ease of doing business

New Investment Policy cascades initiatives across both a national and sector lens

The NIA functions as guiding principles to establish strong linkage between initiatives and target outcomes, such as achieving national target goals and metrics, alongside unlocking targeted investment sector-specific opportunities

National Investment Aspirations

as critical anchor for the New Investment Policy

National-Level

Target Outcomes

defined for each NIA to track outcomes

Strategic thrusts

aligned to delivery of NIA

National-level initiatives

that addresses challenges to NIA

Varying Importance and relevance by sector

Sector-Level

Investment Opportunities

aligned to delivery of NIA and right to win

Strategic thrusts

to address sector-specific challenges

Sector-specific initiatives

that addresses challenges to NIA

The New Investment Policy was devised through extensive stakeholder engagement

The development of the New Investment Policy entailed a robust, comprehensive and collaborative effort across several key stakeholder groups, including: